For Immediate Release
Chicago, IL – January 17, 2012 – Zacks Equity Research highlights International Paper Co. ( (IP - Analyst Report) as the Bull of the Day and Hhgregg, Inc. ( (HGG - Analyst Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on NII Holdings Inc. ( (NIHD - Snapshot Report) , America Movile S.A.B. ( (AMX - Analyst Report) and Telefonica S.A. ( (TEF - Analyst Report) .
Full analysis of all these stocks is available at https://at.zacks.com/?id=2678.
Here is a synopsis of all five stocks:
Bull of the Day:
International Paper Co.'s ( (IP - Analyst Report) third quarter EPS of $0.92 beat the Zacks Consensus Estimate. The company continues with its merger and acquisition strategy to strengthen its businesses. The merger with Temple-Inland will increase its share of the North American corrugated-packaging market from 27% to 40% and will be accretive to EPS in the first year.
Further, International Paper's acquisition of a 75% stake in Andhra Pradesh Paper Mills will help capitalize on the burgeoning demand for paper and packaging products in India. Furthermore, through its joint ventures, International Paper has significant projects underway in Russia and China. These will help the company sustain its earnings growth.
We expect International Paper to continue utilizing its sound cash flow by investing in capital projects, acquisitions and reducing its total debt. Thus, we have upgraded our recommendation from Neutral to Outperform with a target price of $38.00.
Bear of the Day:
Hhgregg, Inc. ( (HGG - Analyst Report) has recently expressed its apprehension with regard to its third-quarter 2012 earnings to decline to approximately $0.60 per share, from the prior-year quarter of $0.66. The estimate slid on the back of lower than expected margins in the video category owing to the promotional activities across all screen sizes.
Hhgregg also expects advertising expenses to escalate due to the recent initiatives taken up to increase its market share in the appliance and home office categories. In addition, Hhgregg has also launched a mobile product offering to enhance its customers shopping experience. The preliminary third quarter 2012 results also led to a downward revision in fiscal 2012 earnings in the range of $1.05 to $1.15, compared with the previous guidance of $1.26 to $1.41.
Going forward, we expect net sales and operating margins to remain muted owing to the seasonal shopping patterns, rising costs and competitive pressures. Moreover, weakness across the consumer electronics and appliances industry may turn out to be serious headwinds to the top-line. We thus maintain our Underperform rating on the stock.
Latest Posts on the Zacks Analyst Blog:
NII Holdings to Underperform
We downgrade our recommendation on NII Holdings Inc. ( (NIHD - Snapshot Report) to Underperform backed by our assessment that the company’s nightmare will continue in the near future. NII Holdings reported dismal financial results for the third quarter of 2011. Both the top line and bottom line were well below the Zacks Consensus Estimates.In synergy with the somber results, management slashed its fiscal 2011 financial outlook mainly driven by volatile macro-economic condition coupled with significant depreciation of several Latin American currencies in comparison with U.S. dollars.
During the previous quarter, net customer additions declined. NII Holdings added 433,300 net new subscribers, down 0.6% year over year.Moreover,quarterly costs per gross subscriber addition were $335 compared with $267 in the year-ago quarter, indicating a rise in customer acquisition cost. Moreover, stiff competitive scenarios in Latin American markets are other impediments for such reduced outlook. We believe intensifying competition and increased promotional expenses may reduce the company’s near-term growth opportunity.
Key competitors are aggressively deploying next-generation wireless technologies in major Latin American markets. For example, America Movile S.A.B. ( (AMX - Analyst Report) has completed rolling out 3G services in Mexico and the major cities of Brazil. It also has 60% 3G penetration in Argentina, Paraguay and Uruguay.
Telefonica S.A. ( (TEF - Analyst Report) rolled out 3G services in Latin America and currently commands a major share of the Brazilian 3G market. Telefonica also completed deployment of 3G networking in 8 Mexican and Venezuelan cities.NII Holdings is far behind other carriers in terms of 3G networks. NII Holdings lacks market diversification strategy as it focuses only on Latin American region. Brazil solely contributes over 50% of the company’s revenue. So any change in Brazilian economy or regulation will hugely affect the company’s business.
Get the full analysis of all these stocks by going to https://at.zacks.com/?id=2649.
About the Bull and Bear of the Day
Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.
About the Analyst Blog
Updated throughout every trading day, the Analyst Blog provides analysis from Zacks Equity Research about the latest news and events impacting stocks and the financial markets.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today by visiting https://at.zacks.com/?id=7158.
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD from MIT Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment
Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at https://at.zacks.com/?id=4582.
Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.
Zacks Investment Research
800-767-3771 ext. 9339